Understanding Property Taxes and Fees in Dubai

Dubai’s tax-free reputation makes it a top destination for real estate investment. While there’s no annual property tax or capital gains tax, property transactions do involve certain fees. Here’s a quick guide to understanding the taxes and fees associated with buying and owning property in Dubai.

1. Dubai Land Department (DLD) Fees

The DLD charges a transfer fee of 4% of the property’s purchase price, which is split equally between the buyer and seller unless agreed otherwise. This fee is mandatory and must be paid during the transfer of ownership.

2. Registration Fees

Once you buy a property, you must register it with the DLD.

• For properties priced above AED 500,000, the registration fee is AED 4,000.
• For properties priced below AED 500,000, the fee is AED 2,000.

3. Real Estate Agent Commission

If a real estate agent is involved, their commission is typically 2% of the property price. Buyers and sellers should confirm the commission rate in advance to avoid surprises.

4. Mortgage Registration Fees

For those financing their property, the DLD charges a 0.25% mortgage registration fee on the total loan amount, plus an additional AED 290 for administrative fees.

5. Service Charges

Once you own a property, you’ll need to pay annual service charges to cover the maintenance of common areas like elevators, swimming pools, and gardens. These fees vary depending on the location and type of property, ranging from AED 10–50 per square foot.

6. No Annual Property Tax

One of Dubai’s biggest advantages is the absence of an annual property tax, which makes it significantly more affordable than other global cities like London or New York.

7. Other Fees

• Valuation fees: If you’re applying for a mortgage, the lender may charge AED 2,500–5,000 for a property valuation.
• Developer fees: For off-plan properties, some developers may include administrative or registration fees in the agreement.

Final Thoughts

Dubai’s property market is investor-friendly, with minimal taxes and transparent fee structures. While there are upfront costs involved, the lack of recurring taxes makes owning property in Dubai a lucrative long-term investment.

Considering buying property in Dubai? Stay informed about these fees to plan your budget effectively!